Reaching for the Stars: An Experimental Study of the Consumption Value of Social Approval

Matthias Greiff and Fabian Paetzel

No 201208, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: We present a theoretical model of a linear public good game in which heterogeneous players express social approval after observing contributions. The model explains how social approval is expressed and predicts positive contributions if subjects have a preference for social approval. Using a controlled laboratory experiment we test our model. In the experiment, subjects conduct computerized tasks that require substantial effort resulting in endowments from which contributions can be made to a linear public good. After observing others’ contributions subjects express social approval. Our main hypothesis is that subjects have a preference for social approval so that the expression of social approval will increase contributions, even if reputation building is impossible. We vary the information available to subjects and investigate how this affects the expression of social approval and individual contributions. Our main finding is that the expression of social approval significantly increases contributions. However, the increase in contributions is smaller if additional information is provided, suggesting that social approval is more effective if subjects receive a noisy signal about others’ contributions.

Keywords: Experimental Economics; Linear Public Good Games; Non-monetary Incentives; Social Approval (search for similar items in EconPapers)
JEL-codes: C72 C91 D71 D83 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2012
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Citations: View citations in EconPapers (3)

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